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"Governance in Albania has deteriorated! Living standards far behind the EU"

"Governance in Albania has deteriorated! Living standards far behind the

Living standards in the Western Balkans are far behind the EU countries.

All six WB-6 countries have a GDP per capita adjusted for purchasing power (PPP)) that is less than half the EU average.

The European Bank for Reconstruction and Development in the latest report "Can the Western Balkans converge towards EU living standards?" stated that the improvement of governance in Albania and the Region can be an efficient tool to increase well-being and push forward the pace of convergence to reach EU standards.

According to the EBRD, improving the quality of governance can help change demographic trends, especially in Albania. The region has taken steps backwards in governance standards in recent years, widening the gap with peer countries in the EU and elsewhere.

The EBRD notes that the GDP gap between the BB-6 and the EU has narrowed over the past two decades, but the pace of convergence has slowed since the global crisis of 2008-09. According to recent growth trends, it may take 70 years or more before WB-6 reaches the well-being of EU states. Therefore, the main question is: What can be done to accelerate the rate of convergence? And EBRD experts think that Reforms can make a difference. Everyone agrees that more needs to be done to make a more stable and well-functioning market economy. But which reforms are likely to prove most effective in accelerating convergence? Specifically, convergence may have been accelerated by:

Areas requiring special attention include the general ineffectiveness of state institutions, the courts, the lack of protection for property rights and intellectual property, and the high level of corruption.

The EBRD notes that weak governance is not only a major obstacle for investors, but also a disincentive for the local population, encouraging young people to emigrate (and discouraging immigrants from returning). The EBRD says improved governance can address the region's skills deficit, by persuading talented people to stay or promoting the return of those who have fled.

Greater openness to trade and investment will make the region more competitive. For the past three decades, the efforts of Western Balkan economies to integrate more fully into regional and global markets have been hampered by a legacy of poor infrastructure quality, barriers to cross-border trade, and a lack of knowledge and sophistication that prevents them from enter richer markets.

The EBRD points out that the attraction of foreign investors can strengthen the region's competitiveness and bring new opportunities for growth.

The EBRD notes that the fundamental problem in the 6 countries of the Western Balkans is low productivity, which has been accumulated by under-investment in the economy, weak institutions and, more recently, unfavorable demographics and a difficult business environment./Monitor

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